Trump pauses Tariffs for 90 days and stocks skyrocket: What will happen to grocery prices?

On Thursday, April 10, the Bureau of Labor Statistics will release the March Consumer Price Index report, providing insights into how the initial tariffs imposed by the Trump administration on Canada and Mexico (goods that do not fall under the USMCA), as well as those on China, steel, and aluminum. The April CPI report, which will be released in early May, will capture the initial impacts of the 10 percent reciprocal tariffs the White House confirmed would go into effect, replacing the more punitive duties that had sent markets tumbling and sparked fears of recession.

According to the US Department of Agriculture (USDA), as of 2021, around 60 percent of fresh fruit and 38 percent of fresh vegetables consumed in the US were imported. On the vegetable side, these figures exclude potatoes, sweet potatoes, and mushrooms. In 2023, the US imported around 86 million tons of food and consumed approximately 302 million tons, meaning imports represented around 28 percent of all food purchased in the US.

The food products that could rise as tariffs go into effect

When it comes to an increase in the grocery bill of households, foods that are imported at high levels are more likely to see their prices increase.

Coffee prices could be some of the first affected by tariffs

Nearly all coffee consumed in the US is imported, and over the last year, the price has already increased by five percent. As 10 percent tariffs go into effect on coffee producers like Brazil, Vietnam, Costa Rica, and Indonesia, importers might pass along the increase in price to consumers. The Center for American Progress released a list of estimates based on the tariffs initially proposed by the White House. The 10 percent tariffs on coffee from Brazil are expected to increase a twelve-ounce package price tag by $0.83 to $9.13. Prices for strawberries from Chile could increase by $0.60 to $6.59 a pound.

However, commodities, like beef, where the domestic market may be able to increase production, may be able to limit price hikes for households.

Most food imports from Mexico will not be impacted

There is one exception. The US imports billions of dollars worth of fruits and vegetables from Mexico, including tomatoes, avocados, and strawberries, and many of these products are covered under the USMCA, the trade agreement between the US, Mexico, and Canada, and thus will not see tariffs imposed. However, tariffs will still go into effect on Guatemala, which provided around 40 percent of bananas consumed in the US in 2023, according to the United Nations Food and Agriculture Organization (FAO).

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